The RBA don't control mortgage rates. Mortgage rates are now rising regardless of RBA cash rate.
More than happy to be corrected, but if the RBA sees banks moving their rates up when they (the RBA) don't especially want, won't the RBA just quite probably respond by dropping their rate a bit more?
PS: Welcome back Poony - Hope tha honeymoon woz bonzer!
A Professional Demographer to an amateur demographer:"negative natural increase will never outweigh the positive net migration"
Finally they admit that the cash rate is ultimately irrelevant when it matters most...
Incorrect, the cash rate is still the main influence over the mortgage rates, but it's not the only influence.
If mortgage rates rise, it will be because the RBA are comfortable with the rise. If they aren't comfortable with rising mortgage rates, they will drop the cash rate, and if needed they can control the 10 year rates as well.
Take risks - if you win you will become wealthy, if you lose you will become wise
More than happy to be corrected, but if the RBA sees banks moving their rates up when they (the RBA) don't especially want, won't the RBA just quite probably respond by dropping their rate a bit more?
PS: Welcome back Poony - Hope tha honeymoon woz bonzer!
With about 40% of bank funding coming from overseas the RBA can lose much influence on mortgage rates if the buyers of the bank bonds/hybrids expect greater return for their funds. Also banks can raise savings/term deposit rates to attract funds but this may still mean mortgage rates can move outside of RBA moves.
In real terms there is not a lot of room left in the RBA rate to help offset wholesale funding cost rises if they continue to rise. (There is an expectation that that is going to occur in the near term)
The honeymoon was great Herbie. We did relo run in Italy and then a river cruise through Europe and had a fantastic time.
There are some people who seem angry and continuously look for conflict. Walk away, the battle they are fighting isn't with you, it's with themselves.
The first lesson of economics is scarcity: There is not enough of anything to satisfy all who want it. The first lesson of politics is to disregard the first lesson of economics. ~ Thomas Sowell.
Who was the fool, who the wise man, who the beggar or the Emperor? Whether rich or poor, all are equal in death.
Finally they admit that the cash rate is ultimately irrelevant when it matters most...
The RBA doesn't set interest rates with the primary goal being to alter home loan rates. Surely you know about this? It's been discussed here previously.
With about 40% of bank funding coming from overseas the RBA can lose much influence on mortgage rates.
Yes a very inconvenient fact....
stinkbug
7 Dec 2016, 08:42 AM
The RBA doesn't set interest rates with the primary goal being to alter home loan rates. Surely you know about this? It's been discussed here previously.
The RBA doesn't set interest rates with the primary goal being to alter home loan rates. Surely you know about this? It's been discussed here previously.
Pretty good chance they will be forced to drop rates with todays GDP numbers.
Take risks - if you win you will become wealthy, if you lose you will become wise
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